- Net Income: $12.9 million, an increase of 2.6% over the prior quarter.
- Return on Average Assets: 0.84%.
- Return on Average Equity: 7.74%.
- Consolidated Equity to Assets Ratio: 10.95% for Q3 2024, up from 10.31% in Q3 2023.
- Book Value Per Share: $35.19, up 7.3% from $32.80 a year earlier.
- Total Loans: Nearly $5.1 billion, an all-time high.
- Average Loans Growth: 2.6% or $127 million to $5 billion from Q3 2023.
- Residential Real Estate Portfolio Growth: $50.4 million or 1.2% in Q3 2024 over Q3 2023.
- Home Equity Lines of Credit Growth: $60 million or 18.7% over the same period in 2023.
- Average Commercial Loans Growth: $18.1 million or 6.9% over the same period in 2023.
- Total Deposits: $5.3 billion at the end of the quarter.
- Net Interest Income: $38.7 million for Q3 2024, an increase of $883,000 or 2.3% compared to the prior quarter.
- Net Interest Margin: 2.61%, up eight basis points from the second quarter of 2024.
- Yield on Interest Earning Assets: 4.11%, up five basis points from 4.06% in Q2 2024.
- Cost of Interest Rate Liability: Decreased to 1.94% in Q3 2024 from 1.97% in Q2 2024.
- Assets Under Management: $1.3 billion as of September 30, 2024.
- Non-Interest Expense: $26 million, down $447,000 from the prior quarter.
- Non-Performing Loans: 0.38% of total loans, steady over the quarter.
- Allowance for Loan Losses: $50 million with a coverage ratio of 257%.
Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trustco Bank Corp N Y (TRST, Financial) reported a net income of $12.9 million for the third quarter, marking a 2.6% increase over the prior quarter.
- The bank achieved an increase in net interest margin over the quarter, driven by better interest rates on new loans and controlled expenses.
- Total loans reached an all-time high of nearly $5.1 billion, demonstrating strong loan portfolio growth.
- Credit quality remains strong with non-performing loans steady at 0.38% of total loans, reflecting high underwriting standards.
- The wealth management division continues to be a significant source of non-interest income, with $1.3 billion in assets under management.
Negative Points
- The bank's growth strategy did not include any major breakthroughs, likened to hitting singles and doubles rather than home runs.
- Installment loans decreased by 9.5% over the same period in 2023, indicating a decline in this segment.
- Non-performing assets increased slightly to $21.9 million from $19.1 million a year ago.
- The cost of interest rate liabilities remains relatively high, although there was a slight decrease from the previous quarter.
- The bank's branch network has decreased year over year, which may impact customer reach and service.
Q & A Highlights
Q: Can you provide insights on potential credit issues due to hurricane damage to homes you have mortgages on?
A: Robert J. McCormick, Chairman, President, and CEO: We've experienced several storms and haven't faced significant credit issues. We establish reserve accounts for affected homeowners to manage repairs, but this storm hasn't caused major impacts.
Q: What are the current pricing trends for maturing CDs compared to new ones?
A: Robert J. McCormick, Chairman, President, and CEO: Customers prefer three-month CDs, with a 60/40 split between three-month and twelve-month terms. The three-month rate is around 4.5%, and the twelve-month rate is about 4%.
Q: Was the increase in financial services revenue driven by higher assets under management (AUM) or other factors?
A: Robert J. McCormick, Chairman, President, and CEO: The increase was due to higher AUM and proactive fee management. Our financial services team is strong, conducting seminars and maintaining customer contact, contributing to positive trends.
Q: With a strong capital position, how do you prioritize growth, dividends, or share repurchases?
A: Robert J. McCormick, Chairman, President, and CEO: We are considering share buybacks and potential new branch expansions as priorities, keeping our options open as market conditions improve.
Q: How are you managing the net interest margin (NIM) and what are your expectations?
A: Michael M. Ozimek, CFO: We've seen two consecutive quarters of NIM improvement, with a focus on lowering time deposit rates while retaining products. We are optimistic about continued margin recovery.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
